HomeMy WebLinkAboutStaff Report 4013
City of Palo Alto (ID # 4013)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 10/7/2013
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Summary Title: Reject Bids: Electrical Systems Upgrade at the Administration
Building of the RWQCP
Title: Rejections of Bids for the Administration Building Electrical Systems
Upgrade Project at Regional Water Quality Control Plant - Capital
Improvement Program Project WQ-80021
From: City Manager
Lead Department: Public Works
Recommendation
Staff recommends that Council reject all bids for the construction of the
Administration Building Electrical Systems Upgrade Project at the Regional Water
Quality Control Plant (CIP WQ-80021).
Executive Summary
The Electrical Systems Upgrade project, which would provide emergency power
and new electrical equipment for the Administration Building at the Regional
Water Quality Control Plant (RWQCP), was issued for bid, and two excessively
high bids were received. The bids for the project should be rejected as the bid
price of the project is not justifiable. The project will be evaluated for possible
repackaging to attract more competitive bidding and to be more cost effective.
Background
On May 21, 2012, Council awarded a contract to DTN Engineers, Inc. (Staff Report
#2761) to provide engineering services to design an electrical system to replace
the existing system in the Administration Building of the RWQCP. The design has
been completed. The plans and specifications were issued for bid on July 16,
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2013.
Discussion
The project requires installation of high voltage electrical equipment. Industrial
electrical contracting firms are most qualified to handle the project. A limited
number of general contractors who have in-house electrical workers can also
construct the project effectively. The bid documents attempted to attract the
electrical contractors. However, none of the electrical contractors responded to
the invitation for bid and only two general contractors submitted bids for the
project. Staff contacted several electrical contractors who did not respond to the
bid. All of the electrical contractors that staff contacted stated that the timing of
the project was the reason for their decision not to respond. They explained that
they were already committed to similar projects and did not have additional
resources.
The engineer’s estimate for the project is $1.5 million and is based on actual
quotes from equipment manufacturers as well as historical labor cost for similar
projects. The estimation method is traditional and widely used. The two bids are
significantly higher than the engineer’s estimate. Staff believes that two major
factors contributed to the cost difference.
First, the lack of competition disadvantaged the project. Staff contacted other
wastewater treatment facilities that have similar projects on-going and a
comparison of the project costs confirmed that the bids on our project were high.
The failure of the project to attract qualified electrical contractors is a major
concern. If this project is to move forward, the RWQCP needs to find ways to
attract more qualified bidders. It is possible that issuing the project for bid at a
later date, when the electrical contractors are not as busy, would gain some
potential bidders. Staff would need to maintain contact and communication with
potential bidders to elicit interest in the project.
Secondly, another factor of concern is related to specific requirements in the
equipment specification and method of execution. In estimating the material
costs, the consultant relied on manufacturers’ quotes. It appears that the quotes
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did not account for the costs for certain specific requirements, which contributed
to discrepancies in the material costs. The RWQCP would need to evaluate the
cost benefits of some of the features and requirements. Normally, value
engineering will not be performed on projects of this size. However, in this case,
the project may benefit from value engineering in order to reduce cost.
Project Description
The work to be performed under the project is to relocate and install an existing
generator, furnish and construct an electrical building above the flood level,
furnish and install a new electrical load center, step-down transformer, motor
control center (MCC), and provide a control system.
Summary of Bid Process
Bid Name/Number RWQCP Administration Building Systems
Upgrade Project IFB #151059 Proposed Length of Project 13 months
Number of Bids Mailed to
Contractors
21
Number of Bids Mailed to
Builder’s Exchanges
2
Total Days to Respond to Bid 35
Pre-Bid Meeting Yes
Number of Company Attendees at
Pre-Bid Meeting
11
Number of *Bids Received: 2
Base Bid Price Range From a low of $2,578,000 to a high of
$2,814,000.
*Bid summary provided in Attachment A.
Staff has reviewed all bids submitted in accordance with the award criteria in the
Invitation for Bid (IFB), and recommends that Council reject all bids. Staff will
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evaluate how to repackage the project to attract more bidders and perform value
engineering to reduce costs. If the project can be constructed in a cost effective
manner, staff will return to Council for funding to redesign/repackage the project
for rebid.
Resource Impact
Funds for the project are budgeted in the Wastewater Treatment Fund, Capital
Improvement Program Project WQ-80021.
Policy Implications
Recommendation on this project does not represent a change in existing City
policies.
Environmental Review
The recommended action is exempt from the provisions of the California
Environmental Quality Act (CEQA) pursuant to Section 15303, (a Class 3
exemption) which involves construction and location of limited numbers of new,
small facilities or structures.
Attachments:
Attachment A: Bid Summary (PDF)
Attachment A
Bid Summary
Administration Building Systems Upgrade Project
IFB 151059
Engineer’s Estimate Anderson Pacific Engr. Blocka Construction
Mobilization $35,000 $100,000 $100,000
Demobilization $20,000 $10,000 $20,000
Furnish & install MCC L $355,000 $500,000 $600,000
Furnish & install prefab building $170,000 $480,000 $500,000
Furnish & install LC 10 $170,000 $280,000 $300,000
Furnish & install 15 KV system $116,000 $300,000 $300,000
Furnish & install control system $96,000 $300,000 $300,000
Switch over operation $21,000 $70,000 $50,000
Differing site conditions $50,000 $50,000 $50,000
Transport & install existing generator $5,000 $8,000 $5,000
All other work $470,000 $480,000 $589,000
Total $1,508,000 $2,578,000 $2,814,000